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US Session - Lower Commodity Prices Push Dollar Higher
July 08, 2008 7:06 PM CEST
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G10 Advancers and Decliners vs USD |
 | AUD | -0.20 | | | NZD | -0.33 | | | GBP | -0.36 | | | CAD | -0.37 | | | EUR | -0.41 | | | JPY | -0.43 | | | DKK | -0.44 | | | CHF | -0.69 | | | SEK | -0.77 | | | NOK | -1.13 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,033.10 | - 2.44 | | Hang Seng Index | 21,220.81 | - 3.15 | | FTSE 100 Index | 5,440.50 | - 1.31 | | CAC 40 Index | 4,275.61 | - 1.54 | | DJIA Index | 11,290.33 | + 0.52 | | S&P 500 Index | 1,257.16 | + 0.38 | | NASDAQ 100 Index | 2,260.41 | + 0.76 |
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World Markets |
Current Level |
% Change |
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| Gold | 921.16 | - 0.50 | | Silver | 17.84 | + 0.30 | | VIX | 24.85 | - 3.64 | | Crude wti | 136.62 | - 3.36 | | USD Index | 73.01 | + 0.47 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Nationwide Consumer Confidence | -- | 69 | UK / 23.01 | | Core Machine Orders (may) mom | 5.5 | 1.1 | JP / 23.50 |
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Currency Tech |
AUDUSD
R 3: 0.9827
R 2: 0.9670
R 1: 0.9640
CURRENT: 0.9534
S 1: 0.9512
S 2: 0.9560
S 3: 0.9590
EURJPY
R 3: 169.46
R 2: 169.15
R 1: 168.63
CURRENT 168.16
S 1: 167.13
S 2: 166.10
S 3: 166.00
USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3654
S 1: 1.3565
S 2: 1.3506
S 3: 1.3470
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Market Brief |
The Usd remained strong in the European session based on weaker commodity prices and light economic data out of the US. The EurUsd moved back to the 1.56 level after losing a bit of ground over night mainly due to the speculation that Freddie Mac and Fannie Mae will need to recapitalize. The UsdJpy continues to trade at the low 107 level, while the GbpUsd is testing the 1.97 level. European equity markets declined sharply based on weak economic data out of Germany, while the US markets are mixed due to lighter crude oil prices. Commodities have retreated from recent highs in both energy and metals sectors with oil trading lower at 135 and, gold lower as well at 919. Bonds rallied in Europe prompted by economic concerns following recent data, while treasuries are mixed with yields on the 2yr wider by 2bps, and the rest of the curve tightening based on concerns about future US market performance.
In the Eurozone, the German Chamber of Commerce cited that weak economic data and higher energy prices should lend to a growth rate around 1% in 2009. The market doesn’t expect the ECB to revert to a more dovish tone until energy prices ease further, thus allowing inflation to continue to be a central concern. The UK saw further weakness in the housing sector, and it is reflected in the price of the cable as it is trading with a 1.97 handle against the dollar. DLCG House Price Index came in at 3.7%, which was lower than the prior month but better than expectations which were 3.2%. Consumer confidence will be released later this evening for the UK; we should look for a soft number considering pressures stemming from the housing decline.
The markets are seeing relief in commodity prices, providing room for the dollar to continue its recent rally. With that said, any hint of negative news from the weak performing financials or continued losses in the housing market could cause a significant turnaround in the dollar. Pending home sales fell to -4.7% vs. -2.4% expected, while it is a volatile number, we remain attentive to housing data. Consumer credit is scheduled to be announced this afternoon, concluding a rather light day in economic news from the US.
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Asian Session - Risk Aversion Increases
July 08, 2008 10:30 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.19 |  | | CHF | -0.10 | | | EUR | -0.16 | | | CAD | -0.17 | | | DKK | -0.18 | | | GBP | -0.18 | | | AUD | -0.28 | | | NZD | -0.28 | | | SEK | -0.40 | | | NOK | -0.53 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,033.10 | - 2.44 | | Hang Seng Index | 21,252.98 | - 3.01 | | Shanghai Index | 2,812.08 | + 0.70 | | FTSE futures | 5,516.00 | + 1.63 | | DAX futures | 6,339.00 | - 1.83 | | SMI Futures | 6,825.00 | + 0.44 | | DJIA futures | 11,142.00 | - 0.56 |
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World Markets |
Current Level |
% Change |
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| Gold | 928.66 | + 0.30 | | Silver | 17.84 | + 0.33 | | VIX | 25.78 | + 3.99 | | Crude wti | 141.72 | + 0.24 | | USD Index | 72.76 | + 0.12 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| CLG House Prices (May) | 3.3% | 4.9% | UK / 8.30 | | Pending Home Sales (May) | -3.0% | 6.3% | US / 14.00 | | Change in Consumer Credit (May) | $7.5bn | $8.9bn | US / 14.00 | | Wholesales Inventories (may) | 0.7% | 1.3% | US / 14.00 | | Nationwide consumer confidence | -- | 69 | UK / 23.01 | | Core Machine Orders (may) mom | 5.5 | 1.1 | JP / 23.50 |
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Currency Tech |
AUDUSD
R 3: 0.9827
R 2: 0.9670
R 1: 0.9640
CURRENT: 0.9526
S 1: 0.9512
S 2: 0.9560
S 3: 0.9590
EURJPY
R 3: 169.46
R 2: 169.15
R 1: 168.63
CURRENT 167.53
S 1: 167.13
S 2: 166.10
S 3: 166.00
USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3634
S 1: 1.3565
S 2: 1.3506
S 3: 1.3470
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Market Brief |
The Usd weakened in Asian session as risk aversion crept back into the market. EurUsd jumped to 1.5753 before retracing to 1.5700 support while UsdJpy fell from the 107.33 highs to 106.83. Risk appetite declined as a research report arguing that Freddie and Fannie would need additional capital, circulated in the market sending US and Asian stocks down and 2 year yields fell by 8bps. Carry trades also felt the effect of the sentiment shift with EurJpy falling sharply to 167.83 from 168.61 and AudJpy trading down to 101.90. Whether its pressure from the G8 summit which began yesterday (leaders have continuously stressed the need for action on food & energy cost) or reaction to deteriorating global growth but either way crude closed down to $141.64bbl. Gold closed lower; the most active Aug '08 contract down $4.80 to $928.80. Sep '08 silver -45.0 ¢ at $17.920/oz.
Asian markets trading down this morning amid concerns that the credit market losses will widen and inflation will further slowdown the global economic growth. Japan's Inpex Holdings declined driven by weakness in the energy sector. Kookmin Bank, South Korea's largest, tumbled the most in almost four months following a broker downgrade. G8 has stated that the global economy faces uncertainty and downside risks mainly posed by the sharp rise in oil prices. It also made a small indication that they wanted to see the Chinese Yuan appreciate to help reduce global financial imbalances. No statement on FX so far.
Yesterday dreadful manufacturing and industrial output which both fell well below expectations should continue to weigh on the Gbp. And in Asian session BCC Quarterly Economic Survey highlighted slowing economic activity and rising price pressures. We are now seeing significant deterioration in multiple UK sectors (and at a faster pace then anticipated) which will eventually create a significant dilemma for the BoE. According to the British Chamber of Commerce the economy looks very likely to fall into recession as sales of services and manufactured goods fell sharply in the second quarter. The BCC Index fell to its lowest number since 1992 as a serious slowdown in the property market and rising inflation has seen a dramatic decline in confidence.While Nationwide and DCLG housing prices should show additional weakness we are expecting the MPC to hold at 5.00% this week.
12.00gmt - Fed’s Bernanke Speaks (but no Q&A)
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